The Valuation Office Agency (VOA) is calling on the sector to engage with the development of business rates that will be applied to energy storage projects in 2022, including those attached to subsidy-free solar farms.

The division of Her Majesty’s Revenue & Customs (HMRC) is currently investigating how to apply new rates to the revenues accrued by energy storage technologies, including standalone and co-located projects with all generation technologies, Solar Power Portal has learned.

Following last year’s widely reported and controversial review, which saw a ‘solar tax hike’ of six to eight times the previous levels applied to existing solar installations, the VOA is now casting its eye towards energy storage, which currently are not included in the business rating list at all.

The new rates to be applied to storage for the first time are likely to impact subsidy-free solar farms currently being developed.

Historically, business rates have been applied to the subsidy payments made to solar projects under the Renewable Obligation and feed-in tariff schemes. However, with the UK moving to a subsidy free environment, these are likely to be applied only to the generation capacity of the solar park that it exports to national or distribution grids.

With many of these projects planning to use battery storage to build a subsidy-free business case, the VOA is seeking out where new battery projects are being planned or built and if they are co-located with solar farms.

Using technology and revenue values in 2020, two years before the next review as set in legislation, rateable values could be applied in two ways to these projects. The VOA is considering the use of a capital expenditure or contractors’ revaluation, taking into account a range of initial project costs to form an annual equivalent of business rates applied to revenues.

We hear from Ram Ramachander, Chief Digital Officer & Chief Commercial Officer for Social Innovation Business, at Hitachi Europe Ltd about how it is aiming to deliver future-focused battery storage solutions.

Maintaining a stable supply of high-quality electricity is becoming a greater global challenge as larger amounts of renewable energy are introduced to the power grid. High-quality electricity, both stable in voltage and frequency, is essential as a power source and the demand for new energy storage systems to overcome this challenge is rising. Ram Ramachander, Chief Digital Officer & Chief Commercial Officer for Social Innovation Business at Hitachi Europe Ltd, highlights the efforts of the Japanese tech giant to develop new battery storage solutions, the expansion of smart metering and electric mobility initiatives, and considers what the future for energy holds…

“Connectivity, and access to unprecedented amounts of data, is revolutionising many industries, and energy is no exception. Digitalisation is transforming the way we generate, distribute and manage energy. Artificial intelligence and machine learning enable predictive maintenance across entire energy networks, whilst battery storage technology is allowing renewable energy to be integrated. In our homes, smart meters are being installed and electric vehicles are being purchased. Together, these advancements are democratising energy, empowering consumers to become ‘prosumers’ – people who both produce and consume energy. With such constant change, where will the next development happen? These issues, and many more, are explored in a recent white paper created by Hitachi in partnership with Frost and Sullivan. The research highlighted three areas where innovation is happening at a rapid rate: the boom in battery storage, the expansion of smart metering and the age of electric mobility.”

While California and other solar-heavy states are leading on energy storage targets, experts say New York, New Jersey, Massachusetts and Maryland could quickly close the gap, with political support.

“Legislators in those states are putting everybody on notice that ‘We’re going there,’” said Mike Jacobs, a Cambridge, Mass.-based senior managing analyst with the Union of Concerned Scientists. “It might not be as lucrative as you want or as scary as you feared, but we’re going there.”

And they can “go there” because prices on storage systems have dropped as batteries and other technologies have flourished.

However, “without public policy prodding, really significant adoptions of energy storage are going to take a long time because of inherent inertia in the utility world,” Jacobs continued.

Judy Chang, a Massachusetts-based principal with the Brattle Group, agrees. In fact, she said, the Northeast could “out-megawatt” the sunnier west on energy storage if wholesale electricity marketers step up and if states unlock the benefits for customers as well as transmission and distribution providers.

States intent on maximizing energy storage at the local level received a complementary boost from the Federal Energy Regulatory Commission (FERC), which recently directed wholesale electricity market operators—Independent System Operators (ISO) and regional Transmission Organizations (RTOs)—to design energy storage rules.

Chang is one of four authors of a report predicting that FERC’s Order 841 is setting the course for 50,000 MW of storage nationwide.

With California forecasting 10,000 MW of storage longer-term, 50,000 MW across the country “is not that far of a reach,” she said.

Jacobs agreed, calling Order 841 an eye-opener at the grid level. “It says you can’t stand idle; you can’t exclude energy storage.

Researchers have tapped into the benefits of both passive and active equalizers to create a cheaper and longer lasting battery pack.

A team from the University of Toledo (UT) has developed the first hybrid equalizer that combines the high performance of an active equalizer with the low cost of a passive equalizer, which could be a new energy storage solution for battery packs in electric vehicles, satellites, planes and grid stations.

”It’s a game changer because we solved the weak cell issue in lithium ion battery storage for packs with hundreds of cells,” Ngalula Mubenga, PhD, an assistant professor of electrical engineering technology at UT, said in a statement. “Whenever we are talking about batteries, we are talking about cells connected in a series.

“Over time, the battery is not balanced and limited by the weakest cell in the battery,” she added.

The equalizer—dubbed the bilevel equalizer—includes cells that are grouped into sections, where each cell within a section is balanced by a passive equalizer, while the entire section is balanced by an active equalizer.

“If there are 120 cells in a battery, divide the cells into 10 groups of 12,” Mubenga said.  “Then you only need nine active equalizer units and 120 passive equalizer units using the bilevel equalizer.

“With current active equalizers, manufacturers would have to use 120 active equalizers,” she added. “For manufacturers that can’t afford to use only active equalizers, the bilevel equalizer is the solution to the problem.”

After testing the new equalizer, the researchers found that the discharge capacity of lithium ion batteries increased by about 30 percent and the pack lasts longer because the cells were balanced.

The bilevel equalizer will allow battery makers and automotive manufacturers to forego balancing the cell voltages in large battery packs using either a passive circuit that loses more energy or an active circuit, which can be 10 times more expensive.

The UK’s Valuation Office Agency (VOA) is calling on the sector to engage with the development of business rates that will be applied to energy storage projects in 2022, including those attached to subsidy-free solar farms.

Business rates are a form of occupation tax levied on almost all non-domestic properties in Britain. The VOA, a division of Her Majesty’s Revenue & Customs (HMRC), is currently investigating how to apply new rates to the revenues accrued by energy storage technologies, including standalone and co-located projects with all generation technologies, our UK sister site Solar Power Portal has learned.

Following last year’s widely reported and controversial review, which saw a ‘solar tax hike’ of six to eight times the previous levels applied to existing solar installations, the VOA is now casting its eye towards energy storage, which currently are not included in the business rating list at all.

The new rates to be applied to storage for the first time are likely to impact subsidy-free solar farms currently being developed.

Historically, business rates have been applied to the subsidy payments made to solar projects under the Renewable Obligation and feed-in tariff schemes. However, with the UK moving to a subsidy-free environment, these are likely to be applied only to the generation capacity of the solar park that it exports to national or distribution grids.

With many of these projects planning to use battery storage to build a subsidy-free business case, the VOA is seeking out where new battery projects are being planned or built and if they are co-located with solar farms.

Using technology and revenue values in 2020, two years before the next review as set in legislation, rateable values could be applied in two ways to these projects. The VOA is considering the use of a capital expenditure or contractors’ revaluation, taking into account a range of initial project costs to form an annual equivalent of business rates applied to revenues.